Athletic apparel retailer Lululemon Athletica Inc.’s online sales increased 15.7% in the fiscal third quarter to $89.3 million from $77.2 million in the same quarter a year ago, the company recently reported. Total sales were $479.7 million, up 14.4% from $419.4 million in 2014 for the quarter ended Nov. 1.
Online sales accounted for 18.6% of revenue, up slightly from 18.4% in the year-ago period. Higher traffic and conversion rates on the retailer’s e-commerce site drove the increase in e-commerce sales, the company says, though it was partially offset by lower average order value, which it did not disclose.
“Our women’s business has continued to be strong with an acceleration in pants and bras,” CEO Laurent Potdevin told analysts Dec. 9 on the Q3 earnings conference call, according to a Seeking Alpha transcript.
Lululemon, No. 108 in the Internet Retailer 2015 Top 500 Guide, will launch a global website redesign in in the first part of 2016 that will boost the retailer’s ability to personalize content, according to the company. “We’re investing significantly in building our customer relations management and analytics capability,” Miguel Almeida, executive vice president of digital, told analysts on the call.
Lululemon has implemented radio frequency identification technology, which helps it track merchandise, in all its North American stores. “This technology is a powerful new tool in creating seamless guest experiences across all channels and has greatly enhanced our ability to access inventory quickly across all channels and locations,” Potdevin said.
The retailer also will test buy online, pickup in store capability next year, but executives did not detail when or where the program will start. “Buy online and pick up in store is one of our critical initiatives to improve the guest experience across channels, something that our guest have been telling us that they really want to see from us,” Almeida said. “The RFID that we have in North America will enable us now to accelerate the testing.”
Lululemon is expanding in Asia and Europe. “In the second week of Q4, we launched our shop-in-shop on Tmall, attracting 165,000 unique visitors on the first day, clearly validating the strength of the platform as key to building our brand awareness in China,” Potdevin said. Tmall.com is a web shopping portal operated by Alibaba Group Holding Ltd.
Lululemon’s showroom in South Korea continues to “far exceed our expectations,” and the retailer will open two stores in Seoul in the first half of 2016, he said. The retailer in Q3 operated 86 showrooms, which are smaller versions of stores and usually open fewer hours: 27 Lululemon showrooms in North America, 19 internationally; and 40 showrooms for Ivivva, its brand of athletic apparel for girls.
For the quarter ended Nov. 1, Lululemon reported:
- Online sales of $89.3 million, up 15.7% from $77.2 million in the year-ago quarter.
- Company-operated store sales of $353.4 million, up 14.0% from $310.0 million.
- Total sales were $479.7 million, up 14.4% from $419.4 million.
- Comparable-store sales increased less than 1%, but excluding the impact of a stronger dollar were up 6%.
- Net income of $53.2 million compared with $60.5 million.
For the nine months ended Nov. 1, Lululemon reported:
- Online sales of $255.2 million, up 23.5% from $206.7 million in the year-ago period.
- Company-operated store sales of $1.01 billion, up 13.2% from $892.2 million.
- Total sales were $1.36 billion, up 13.3% from $1.20 billion.
- Comparable-store sales decreased 1%, but excluding the impact of a stronger dollar were up 4%.
- Net income of $148.6 million compared with $128.2 million.